Netto, Birtley (24 Jan 2011)

The Co-operative Group has announced today that it is to acquire the Netto store in Birtley, Gateshead – one of the six remaining sites that Asda is required to divest following its takeover of the Danish supermarket chain.

The OFT-approved deal is good news in that it secures the future of Birtley’s only supermarket, along with two more Netto sites in Whalley Range, Manchester and Stanton Hill, Nottinghamshire. It means that only three more Netto stores – in Wallasey, Keighley and Barrow-in-Furness – remain to be divested by Asda.

The Co-op has exchanged contracts on the newly acquired stores, which David Roberts, Director of Property for The Co-operative Food, has described as “a valuable addition to our portfolio and another important step in our expansion plans.” The sale is expected to be completed later this year, and the 42 staff employed across the three stores will then all transfer to The Co-operative Group. Until then, my assumption is that Asda will continue to trade the divestment stores under the Netto fascia, as required by the Office of Fair Trading.

Closed down Somerfield, Birtley (24 Jan 2011)

The deal also marks the Co-op’s return to Birtley after a two-year absence, when it traded – briefly – from the Somerfield site across the road. Occupied historically by Presto, Safeway and then Somerfield, the Co-op sold the store that it had acquired to Morrisons in April 2009, only for the Bradford-based chain to close it down. The site remains empty today, hence the especial interest in the fate of Birtley’s Netto, the town’s last supermarket standing.

Today’s news is a reminder of how the Co-op is continuing to grow its supermarket empire following its £1.565bn acquisition of Somerfield, back in March 2009. The Group currently has a 2,800-strong food store network, and intends to add another 300 outlets over the next three years, which will employ 7,000 people.

Recently opened Co-operative Food store in the Strand, London (6 Apr 2011)

50 store openings are planned for 2011 alone, with nine – including three in central London – opened to date. Edinburgh, Glasgow, Southampton, Liverpool, Manchester and Swansea are apparently among the locations that will see new Co-op stores before the end of the year.

The latest UK grocery market share data from Kantar, released this week, continues to show the Co-op firmly in fifth place, its 6.9% share well ahead of Waitrose’s 4.3% but some way behind Morrisons (12.0%) in fourth. However, the Co-op’s present-day share is still somewhat lower than the 7.7% share that the separate Co-op (4.4%) and Somerfield (3.3.%) businesses held at the time of the takeover.

While disposals to other retailers – as required by the OFT – obviously account for some of the drop, a report in Retail Week last year suggested that sales had “collapsed” at former Somerfield stores following acquisition. Data cited by Retail Week showed a 13.3% drop at unconverted stores in the month to April 2010, and a 14.1% decline at stores converted to the Co-op fascia. In contrast, trade at established Co-operative Food stores was up a healthy 1.6%, month on month.

The Co-op argued that lowering prices at Somerfield to match its own accounted for some of the decline; equally, there was always going to be some cannibalisation in creating such an extensive combined store estate. In addition, some consumers who liked Somerfield will no doubt have switched to other supermarkets rather than stay at the Co-op, though other Co-op-loving shoppers may, of course, have moved in the other direction. It’s a complex picture, and with the Somerfield fascia now all but disappeared from the market share data, it will at least be easier to keep track of the Co-op chain’s true performance relative to its peers.

Netto, Old Fold Road, Gateshead (28 May 2010)

Less than six months after the carve-up of the Netto estate was confirmed, the Danish supermarket fascia is well on its way to disappearing from the UK retail landscape.

Haldanes – currently distracted by the collapse of its eponymous chain – was the first to complete conversion of its 20 acquired stores, with all now trading as UGO. Meanwhile, Iceland and Morrisons are in the midst of revamping the Netto sites that they acquired, with some stores – such as the new Morrisons in Tamworth, which I hope to visit later this week – already trading.

Former Netto, Tamworth, before conversion to Morrisons (4 Apr 2011)

Asda itself, of course, has the biggest job, with 147 ex-Netto stores set to be switched over to its new Asda Supermarkets fascia. The first conversions – including Stainforth, below – opened last month, and I’m told by Asda’s PR people that the rest will be finished by November – an impressive rate of more than five conversions a week.

Here on Tyneside, three stores – in Westerhope (Stamfordham Road), Lemington (Northumberland Road) and Gateshead (Old Fold Road) – closed their doors as Netto last Saturday (11 June), and are each set to reopen as Asda Supermarkets on Monday 27 and Tuesday 28 June following a £500,000 refit. For stats buffs, that’s around five times the reported cost of converting a Netto to a UGO.

Early conversion of an ex-Netto in Stainforth, South Yorkshire

However, where Haldanes’ UGO stores are very much an adaptation of the existing Netto fitout, Asda’s revamps are more extensive, involving stripping the stores back to their shell.

In terms of what the converted stores will offer the customer, Asda’s PR – like UGO’s – flags up the key themes of low prices, improved ranging and greater convenience.

On price, Asda’s main headline is that “all newly converted Netto stores will charge the same low price as every other Asda in the UK” – a simple, effective and powerful message that is likely to resonate with shoppers. It should also avoid scaring off loyal Netto customers with prices that are too high, a potential problem that fellow blogger Steve Dresser and Soult’s Retail View readers have highlighted in relation to UGO.

UGO (former Netto) store, Hartlepool (4 May 2011)

On range, Asda again echoes UGO in pledging that customers will be able to “complete a full weekly shop”, with each of the new stores featuring the the full breadth of Asda’s own-label food ranges, including Smart Price, Chosen By You, Extra Special, Good For You, Free From and Organics. However, the increase in product lines (SKUs) from 1,800 to 10,000 rather puts UGO’s 3,000 (or even the now-defunct Haldanes’ 7,000) in the shade.

Finally, in terms of convenience, Asda Supermarkets’ longer opening hours, extra services (PayPoint, National Lottery, cash machines), and the provision of a collection service for online orders should all go some way to increasing footfall and basket size from Netto levels.

Former Somerfield, Adelaide Centre, Benwell (28 May 2010)

Before the new Tyneside Asda stores open in a couple of weeks’ time, I should probably try and check out the recently opened Asda Supermarket in Benwell’s Adelaide Centre. This store opened on 19 May, but is a former Somerfield site rather than an ex-Netto.

Given this acquisition, I was curious about the implications for the Netto at Mill Lane, less than a mile away, which is among the 147 stores that Asda is supposed to be keeping. Tucked down a side street and housed in a corrugated shed, this is hardly the most glamorous of Netto sites, yet it provides an important service to a community that otherwise lacks much in the way of affordable grocery store provision.

I’m assured, however, that the Mill Lane Netto will still be converted to an Asda Supermarket in the coming months, though as yet there’s no confirmed date for when that changeover will take place. I will, naturally, give an update as soon as I receive further news.

In the meantime, do feel free to share your experiences of visiting any newly opened Asda Supermarkets. Whether you’re an ex-Netto shopper or someone who’s been attracted from elsewhere, I – and your fellow Soult’s Retail View readers – will be keen to hear your reactions.

Haldanes logo

The independent supermarket chain Haldanes looks set to become the latest retail casualty, after filing for an administration order today.

In a statement this afternoon, Arthur Harris, the CEO of Haldanes Stores Ltd and Ruston Retail, said:

“Following advice from our lawyers and an insolvency practitioner, we have made the decision to seek an administration order for Haldanes Stores Limited and Ruston Retail Limited in order to protect our position.

“The directors and I are devastated at having to take this step and our thoughts are with our employees who find themselves facing an uncertain future; we would like to publicly thank them for their efforts and loyalty during their time with Haldanes.”

Though Harris’ statement continues by promising to “work closely with the administrator and do our utmost to secure the future of a group of stores in the Haldanes estate”, BBC News is reporting that most of the stores will close next week (14 June), with four shops likely to be acquired by other retailers.

This accords with the update I received from a Kelso shopper earlier today, who told me that staff in her town’s branch of Haldanes had been informed this morning that the store would close on Tuesday. Kelso’s Haldanes, incidentally, is a store that has been through the whole cycle of Safeway to Morrisons to Somerfield to Co-op, prior to assuming its current tenant.

Haldanes store, Belper (23 Dec 2010)

News of Haldanes’ troubles, while unwelcome, is not completely unexpected. Only yesterday, the Haldanes website was taken down, and my Kelso contact reported that it was “getting desperate in the shop”, with “shelves only half full, great gaps everywhere, and staff walking round saying sorry to customers. What a mess – it just means people are going elsewhere because they can’t shop local.”

Deserted Haldanes store (28 Apr 2011). Photograph by Bryan Roberts

For the last month, Haldanes has also been engaged in an extraordinary public dispute with the Co-operative Group, from which it acquired its store estate in late 2009 and early 2010 – a collection of sites, many of them in Scotland, that the Co-op was required to divest following its acquisition of Somerfield.

In a statement last month, Haldanes alleged that the Co-op had “materially breached key terms of the agreements it [Haldanes] and the Co-op entered into and under which it acquired the 26 stores”, and claimed that “if we had been made fully aware of the true trading picture from the outset, we would not have done the deal with the Co-op.”

Haldanes store, Belper (23 Dec 2010)

The Co-op, for its part, claimed that it had started legal proceedings first, seeking to “to recover possession of a number of the 26 stores they bought from us” following “Haldanes’ failure to pay rents owing to the Group.”

At the time, I questioned Arthur Harris about what this implied for the long-term future of the Haldanes chain, given the suggestion in his statement that trading was well below expectations. He responded:

“Haldanes is a solid and robust business with zero debts. I cannot, however, continue to fund this area of the business indefinitely out of my own pocket or from my other business which is why we are focusing our efforts on reaching a quick solution with the Co-op.”

While the Co-op stated that its own legal action had only been “made reluctantly after other avenues had been exhausted”, Harris’ statement today again claims that the Co-op has been unwilling to talk:

“We have made countless attempts to negotiate with the Co-operative Group Limited over the last nine months, all to no avail. As a result, we issued proceedings in the High Court against the Co-op on 10th May 2011. We lodged full details of these proceedings with the High Court and its solicitors yesterday (8th June 2011).

“I am absolutely distraught that it has come to this. We firmly believed that the Co-op would at least sit down with us and hear what we had to say, but they have chosen to either ignore or refuse all of our requests to meet. This has left us with nowhere else to go.”

Whatever the rights or wrongs of the dispute, the whole episode – played out through the media – has come across as unseemly, and has surely absorbed energies that would, ideally, have been invested elsewhere in the business.

Haldanes store interior (28 Apr 2011). Photograph by Bryan Roberts

With the future of the eponymous Haldanes chain looking bleak, Harris will need to turn attention to his other companies – UGO Stores Limited, Haldanes Express Limited, Bakery Products Limited (the recently acquired Woodhead Bakery business), and the overarching Haldane Retail Group Limited – all of which are “unaffected by this development and will continue to trade as normal.”

UGO store, Eston (4 May 2011)

However, just as pricing (not competitive enough) and product availability (not good enough) have been problems at Haldanes, there’s still work to do in addressing similar issues at UGO. A month ago, following my visits to the UGO stores in Eston and Hartlepool, I queried UGO’s apparent move away from the everyday low prices (EDLP) strategy that had made Netto successful, as well as the danger of poor availability undermining its pledge to offer a full weekly shop.

Fellow retail blogger, Steve Dresser, drew similar conclusions in a post yesterday, concluding that while “there is potential with the brand, the offer and the stores to do more, [the] fundamentals of product supply and price remain to be resolved in these early days.”

If nothing else, Haldanes’ difficulties underline the huge challenges faced by any new entrant to the cutthroat UK grocery market. The big players not only have established brands and store estates, but also have massive buying power, streamlined supply chains, quality store environments and generally positive customer experiences that are difficult for a newcomer to compete with.

Fresh produce in Haldanes store (28 Apr 2011). Photograph by Bryan Roberts

At the beginning, Haldanes sought to differentiate itself by sourcing 35% of its food and drink products locally, though this policy seems to have been downplayed more recently. Positioning itself as a supporter of local producers has worked brilliantly for the North West-based supermarket chain Booths, allowing it to carve a distinctive niche and a brand that stands for clearly-defined values. However, it was always likely to be a less lucrative approach for Haldanes, with a disparate geographical spread of stores, many of those in less upmarket, more price-sensitive locations.

Grocer article, November 2009

To end, it’s interesting to remind ourselves that barely eighteen months ago, in November 2009, The Grocer ran an article about three newly launched independent retailers – Haldanes, Asco and Alworths, which between them were hoping to open some 180 stores within three or four years. The reality, of course, has been far different, with the Haldanes chain now on the verge of joining the others in the great retail graveyard in the sky.

Perhaps it’s no coincidence that today’s most successful independent retail chains – B&M Bargains, Heron Foods, and the like – are those that have grown steadily but quietly from humble beginnings, rather than fizzling out once the initial fanfare is over.

Former Safeway, Byker (6 Jun 2011)

It’s amazing how a throwaway remark can prompt an entire discussion on something unexpected…

In my January post about the divvying up of Netto’s North East store estate following the chain’s acquisition by Asda, I made passing reference to Birtley’s former Safeway – a store which Morrisons sold to Somerfield in 2004, bought back in 2009, but has then failed to reopen, leaving Netto as the town’s only supermarket.

My observation subsequently encouraged a whole thread of comments on the fate of former Safeways, highlighting a surprisingly large number of stores that Morrisons initially disposed of but has since reacquired following the Co-op’s takeover of Somerfield – a reflection of Morrisons’ new-found readiness to run more compact supermarkets than had traditionally been the case.

While a fair few ex-Safeways have therefore changed hands as many as three times in the last eight years, the former store in Raby Street, Byker – which I passed by a couple of days ago – is one whose retail use ended with Morrisons’ takeover.

Morrisons, Byker (6 Jun 2011)

With Morrisons having opened a large superstore in Shields Road in 2002, it was always inevitable that the nearby Safeway would be on the OFT’s list of stores – 52 in total – that Morrisons was required to divest. While other Newcastle and North East stores were promptly acquired by other grocers – Heaton and Team Valley by Sainsbury’s, for example – no offers were forthcoming for the Byker Safeway, despite its location close to the Byker Metro station and a parade of smaller shops.

Former Safeway, Byker, with parade of shops opposite (6 Jun 2011)

In December 2004, the OFT reported that:

Morrisons has sought bids for the Byker store. However, to date, no suitable bids have been received, whether from grocery operators or non-grocery operators and whether above open market value or not. Having consulted with Morrisons, the OFT is minded to direct that Morrisons may retain the store at Raby St, Byker…

With Morrisons clearly having no interest in operating a second branch so close to its first, the store – once famous for selling fewer sprouts than any other UK Safeway store – was duly closed.

The property remained empty, I believe, until 2007, when it was bought for £2m – not by another retailer, but by the expanding North East business Winn Solicitors, a company specialising in accident compensation, personal injury claims, and irritatingly catchy local radio jingles.

Rear of former Safeway, Byker (6 Jun 2011)

As you might expect, the property appears to have had some extra windows punched in, to make it suitable for office use, but it still looks for all the world like an abandoned Safeway – complete with clock tower, loading bay, distinctive green paintwork, and a space where the trolleys ought to be.

Side of former Safeway, Byker (6 Jun 2011)

Of course, with Asda set to open a new full-line store in the former Woolworths at Newcastle Shopping Park, Byker residents’ food shopping habits are set to evolve yet again in the coming months.

Morrisons’ arrival on Shields Road, nearly a decade ago, gave a much-needed fillip to a shopping centre that was, arguably, then underserved by its relatively compact, and expensive, Safeway store. It remains to be seen, however, how far the new Asda – with its easy access and edge-of-centre location – will undo those gains.

Former Woolworths, Newton Aycliffe (1 Mar 2011)

With a dwindling number of empty Woolworths stores remaining in the North East, it doesn’t take too long to check out whether anything’s happening on the ground.

I revisited Wallsend’s ex-Woolies back in November, closely followed by Hartlepool and Middlesbrough. This left just Newton Aycliffe, Peterlee and Newcastle to take a look at over the last couple of days, with my visits confirming that all three are indeed still vacant and without any signs of activity.

Former Woolworths, Clayton Street, Newcastle (2 Mar 2011)

Former Woolworths, Peterlee (1 Mar 2011)

Former Woolworths, Newton Aycliffe (1 Mar 2011)

I also called into Seaham – there too, the ex-Woolies building remains empty, though as a result of Ethel Austin’s collapse rather than Woolworths’. As I’ve blogged before, the property hasn’t housed a Woolworths store for a quarter of a century, though the architecture conveys the shop’s Woolies origins much more than its Newton Aycliffe or Peterlee counterparts.

Former Woolworths and Ethel Austin, Seaham (1 Mar 2011)

The fortunes of Seaham town centre as a whole seemed even more polarised than on my previous visit. The Asda-anchored Byron Place mall on the seafront appeared to be thriving, with a good number of shoppers and 100% occupancy of its units.

In contrast, the top end of Church Street – the main pedestrian thoroughfare, and where the ex-Ethel Austin is located – was eerily quiet at 5pm, with just a few shoppers venturing into the tatty-looking and partly-shuttered Somerfield store. Presumably a Co-operative Food makeover will be forthcoming soon, providing a smarter face to the street and a welcome confidence boost for that end of town.

Somerfield, Seaham (1 Mar 2011)

While new occupants of ex-Woolies stores prove elusive for a handful of North East towns, two other places have had a welcome fillip since I last visited.

Back in September 2009, the former Woolworths in Houghton-le-Spring, near Sunderland, was a pretty depressing sight (below) with its boarded-up windows and shuttered frontage.

Former Woolworths in Houghton-le-Spring (11 Sep 2009)

Happily, the premises were taken over by Store Twenty One almost a year ago, and look a whole lot better now than they did on my previous visit.

Former Woolworths (now Store Twenty One), Houghton-le-Spring (1 Mar 2011)

I’d never visited a Store Twenty One branch prior to the company taking over the ex-Woolies sites in Stanley and Jarrow, but I’ve been very impressed with what I’ve seen there and at Houghton-le-Spring. In all three cases, the interiors have been completely transformed, with attractively presented merchandise, good quality signage and an overall fresh and modern look.

It’s just a pity that the company website’s “cheap clothes” tagline still rather undermines its impressive efforts instore. Someone needs to remind owners Grabal Alok that retailers don’t sell “cheap clothes” any more – only “value fashions”.

Another ex-Woolies that’s had a fashion makeover since I last visited is the branch at 12-18 Northgate in Darlington, where work on site was underway back in March last year (below).

Former Woolworths, Darlington (12 March 2010)

Again, the bulk of the property has been transformed, with Next creating a new store at numbers 12-16 that is bright, appealing, and a really positive addition to the street since its opening last July.

Former Woolworths (now Next), Darlington (1 March 2011)

Next door, a portion of the old Woolies – the Grade II-listed number 18 – remains vacant. However, carving it off from the rest of the store does make architectural sense, and allows the merits of its attractive façade to be better appreciated.

Former Woolworths at 18 Northgate, Darlington (1 Mar 2011)

Of course, the flipside of Next’s new store is that the two former Next sites on Northgate have been vacated, both of which are currently empty. The lease of the vacated 1,675 sq ft unit at 59-63 Northgate is currently being advertised by agent Molyneux Rose [broken link removed], while the nearby premises at 21-23 Northgate are empty after hosting a temporary ‘X Factor Factory Clearance’ store.

Former Next at 59-63 Northgate, Darlington (1 Mar 2011)

Former Next at 21-23 Northgate, Darlington (1 Mar 2011)

While temporary and pop-up shops have their place on the high street, there must surely be a tackiness threshold above which an empty shop is preferable – particularly when Simon Cowell’s intellectual property is seemingly being so blatantly infringed.

All this shuffling around in Darlington’s Northgate highlights the need to take any statistics on changing shop vacancy rates with a heavy pinch of salt. Taking the three former Woolies and Next units together, two were occupied and one vacant when I visited Darlington a year ago. Now, however, one is occupied, two are empty, and another vacant unit – at 18 Northgate – has been created.

Just looking at the numbers, without any understanding of the context, this reads like a retrograde step in Darlington’s retail fortunes, with three out of the four shops now being empty where previously it was only one of the three. However, most observers would surely see Next’s investment in Darlington as a positive sign for the town – even if this has resulted in some (hopefully) short-term voids.

Scary numbers might make garish headlines, but they’re no substitute for actually understanding the places that you’re writing about.

Netto, Birtley (24 Jan 2011)

When Asda’s sale of 39 surplus Netto stores was announced a couple of weeks ago, I noted that Birtley – a small town close to here, within the Borough of Gateshead – was home to one of the eight remaining Netto stores that Asda is still required to divest by the OFT.

As I explained then, the closure of the town’s nearby Somerfield store following its purchase by Morrisons in 2009 – and Morrisons’ failure to then reopen it – has left its 11,000 strong population unusually reliant on a single discount supermarket. What happens to Birtley’s Netto is therefore of considerable importance to the people who still use the Durham Road area for their local shopping.

Durham Road shops, Birtley (24 Jan 2011)

Given that independent grocer Haldanes has bought more than half of the divested Netto stores to date, I took the opportunity, while meeting the firm’s bosses, to quiz Chief Operating Officer Richard Collins on whether Haldanes had any interest in the Birtley store.

Netto, Birtley (24 Jan 2011)

He confirmed that Haldanes had visited the shop, and that he considered it to be a “great store” with good parking. Pressed further, he said that Haldanes had no specific plans to acquire additional stores from the OFT’s divestment list, but refused to rule out making a future bid for the Birtley store.

Birtley Netto’s problem is that many of the potential purchasers would seem to be ruled out due to the proximity of their existing shops. Clearly Asda isn’t in the picture, given that it has to divest the store in the first place, while Morrisons – which still owns (and is trying to dispose of) the vacant Somerfield site opposite – is unlikely to be interested.

Tesco, Chester-le-Street (24 Jan 2011)

Meanwhile, Sainsbury’s has a superstore three miles away at Team Valley, and Tesco and Iceland (and Morrisons) have shops at Chester-le-Street, the same distance away in the opposite direction. This only really leaves other discounters – Lidl, Aldi or Haldanes’ new UGO venture – in the frame. However, with a larger supermarket development still possible on the Somerfield site in the future, a hard discounter is, in any case, more likely to be able to compete with whatever new store might open on that site.

Closed down Somerfield, Birtley (24 Jan 2011)

Given the positive feedback from Haldanes, it seems that if the shoppers of Birtley fancy their Netto becoming a UGO, then it’s in their hands to do something about it.

Haldanes’ bosses are reading this blog, so feel free to share your thoughts below, or drop Haldanes a line directly. Who knows, perhaps Soult’s Retail View can harness local people power to help attract an expanding retailer to Gateshead?

Netto store in Gateshead

As I blogged earlier, Asda’s acquisition of Netto’s UK business moved a step closer yesterday, with the news that it has reached agreement to sell most of those Netto stores that overlap with existing Asda sites.

Back in May, when Dansk Supermarked A/S agreed to sell its 194 UK Netto stores to Asda for £778m, it was widely expected that the Office of Fair Trading (OFT) would require Asda to divest some of that portfolio, in order to avoid a lessening of local competition in areas where Asda and Netto are currently both represented.

Asda store

This was confirmed in September, when the OFT announced that it had reached agreement with Asda to divest 47 stores where there were local competition concerns. Of these, the OFT was concerned that some stores may not be of interest to other eligible food retailers, so required Asda to find suitable upfront buyers for those shops before it would allow the remaining store purchases to proceed. At the time, however, “reasons of confidentiality” meant that the identity of the 47 stores to be divested was not revealed; similarly, the number or locations of stores requiring upfront purchasers were not made public either.

Now, yesterday’s various announcements from the parties concerned reveal that Asda has secured buyers for 39 of the 47 divestment stores – including all 25 of those on the upfront list – in the shape of Morrisons, Iceland and the independent grocer Haldanes.

Morrisons – 16 stores

Morrisons store

Morrisons is snapping up 16 of the 39 stores – including 6 from the upfront list – for £28.1m, adding 120,000 sq ft of space to its expanding small-store estate. The handover of stores is expected to take place on a phased basis starting in March, with all the shops expected to be converted to the Morrisons format over the following three months.

Several of these stores – in Castletown (Sunderland), Bedlington and Shildon – are in the North East, while others are in Telford, Tamworth, Rugby, West Bromwich, Oldbury, Boston, Newton-le-Willows, Breightmet (Bolton), Accrington, Castleford, Ravensthorpe (Dewsbury), Armthorpe (Doncaster) and Bransholme (Hull).

Haldanes – 20 stores

Haldanes store

The independent Grantham-based grocer Haldanes is taking a tranche of 20 stores – all but two from the OFT’s upfront list of 25 stores – including North East sites in Ashington, Eston, Hartlepool and Stanley. The other sites to be taken over by Haldanes include Athersley (Barnsley), Blackburn, Boothferry, Bradford, Carcroft (Doncaster), Hull (two stores), Kirkby, Liverpool, Lundwood (Barnsley), Monk Bretton (Barnsley), Nuneaton, Retford and Rotherham, all from the upfront list, plus one each in Bury and Burnley.

Only last week, I remarked that Haldanes’ expansion seemed to have stalled, after an initial period of rapid and spectacular growth. Only launched as a company [broken link removed] in October 2009, the business built up its present portfolio of 23 former Somerfield or Co-op stores over a dizzying two-month period, but there had been no new supermarket acquisitions since January last year [broken link removed]. Indeed, the swift closure of acquired stores in Pontefract and Dunbar, the failure to open the shop it bought in Pwllheli, and reported trading difficulties had all raised question marks over the business’s ability to compete in the UK’s cutthroat supermarket sector.

However, after a quiet few months, this latest acquisition suggests that Haldanes is back on track – good news given that the recent history of the UK grocery sector has tended to involve smaller retailers disappearing through acquisition or collapse, rather than new competitors entering the market and keeping the established players on their toes.

Interestingly, the OFT notes that Haldanes plans to convert the acquired stores to a new discount brand, UGO, which will reportedly “build on the discount retailing strengths of Netto but will also have stronger and broader core grocery range together with a much wider health and beauty offer.” Given that many of the stores on the OFT’s upfront list are, by definition, in less glamorous locations, Haldanes’ move seems like the right approach, and should avoid a repeat of when Somerfield scared away Kwik Save shoppers by converting stores to its eponymous – and more expensive – fascia.

Iceland – 3 stores

Iceland store

Iceland’s package of three stores includes just one from the upfront list, in Platt Bridge, Wigan. Iceland’s marketing department tells me that the two others are in Spennymoor, up here in County Durham, and at Lane Top in Sheffield.

What it all means

Netto in North Shields

So, what does all this mean for the UK’s grocery sector, and for the consumers who shop at those stores?

What’s clear is that the Netto brand will have vanished from the UK by the end of this year, though it will remain elsewhere in Europe – Dansk Supermarked is only selling its British stores, not those in Denmark, Germany or Poland. The 147 Netto stores that Asda is keeping are set to be rebranded as ‘Asda Supermarket’, while Morrisons, Haldanes (UGO) and Iceland will all convert their acquired stores to their own fascias.

Existing Asda in Seaham

Shoppers will no doubt welcome the news that Asda’s converted Nettos will charge the same prices as all existing Asdas, and will feature an average range of 10,000 products – up from Netto’s 1,800. However, some of those who currently use Netto on a regular basis will surely feel some sadness at the loss of its distinctive shopping experience and eyecatching offers.

As noted above, Haldanes’ new UGO stores look likely to be the closest thing to a ‘son of Netto’, presumably combining the best facets of Netto with Haldanes’ own experience of running compact supermarkets over the past year or so.

Given the strong North East presence, it will be fascinating to see what the UGO stores look like, and how they fare. While operating multiple fascias can be a really successful way of targeting different market segments – not just in the grocery sector – it can be a disaster if the execution is poor or the differentiation unclear.

Haldanes store

Indeed, Haldanes tells me that the company is about to launch a third fascia – Haldanes Xpress – which will be applied to a newly acquired petrol forecourt, a convenience store with a post office, and a further eight convenience stores that Haldanes is in “advanced discussions” to buy.

For Iceland, the three new stores represent a modest acquisition for a company that has snapped up well over 50 old Woolworths sites during the past two years, and perhaps suggests that, having reached nearly 800 shops, the number of suitable new sites for Iceland stores is starting to slow.

For Morrisons, however, its purchase signals a determination to make further inroads into the lucrative small supermarket and convenience space. It’s easy to forget that only six years ago, Morrisons had little interest in smaller stores, selling a package of 114 Safeway Compact stores to Somerfield for £260m. Ironically, Co-op’s takeover of Somerfield meant that many of those former Safeways were later resold where they overlapped with existing Co-op sites. In some locations – such as Birtley in Gateshead – Morrisons actually bought back sites that it had disposed of only a few years earlier.

Sainsburys Local store

Nevertheless, with Sainsbury’s and Tesco having already built up their successful small-store estates over many years, and Asda acquiring a strong presence in one fell swoop through its Netto acquisition, Morrisons has a fair bit of catching up to do.

Back in November, there were highly unlikely rumours – seemingly without foundation – about Morrisons planning a takeover bid for the upmarket online grocer Ocado. While Morrisons may be wary of any more major acquisitions after the problems it had digesting Safeway, I would have thought that snapping up a smaller competitor – as Asda has done with Netto – would be a more likely takeover scenario.

A few moments ago I mentioned the former Safeway and Somerfield store in Birtley, in Tyne and Wear, which Morrisons took over in 2009. Unfortunately, Morrisons then decided that it had no use for the site, which has remained vacant ever since and is now being marketed as part of a larger potential development site.

Asda at Washington Galleries

This development has left Netto as Birtley town centre’s only supermarket. However, this store, in turn, is one the eight remaining Netto stores that the OFT is requiring Asda to dispose of, presumably due to the proximity of the huge Asda store – the old Woolco – at Washington Galleries.

Just like in Wallsend – where another store acquired by Morrisons has never opened – Birtley has undoubtedly and understandably suffered from the unexpected closure of its main supermarket. Hopefully a purchaser for the Netto store will be announced soon – after the disappointment and uncertainty of the last couple of years, Birtley surely deserves a food retailer that will invest in the town, and give the locals reassurance that they’ll still have somewhere to shop.

Morrisons store

The Netto store in my old hometown of Tamworth is one of 16 sites that Morrisons is set to acquire following Asda’s purchase of the Netto UK business. The stores are among 47 that the Office of Fair Trading (OFT) has required Asda to sell to competitors, to avoid a lessening of consumer choice in those areas where Asda and Netto currently compete with one another.

With Asda already having a vast store at the nearby Ventura Retail Park, it was always likely that Tamworth’s Netto would be one of those that it would have to dispose of. However, with Sainsbury’s, Aldi, M&S, Iceland, Farmfoods and Tamworth Co-op also all currently represented in either the town centre or at Ventura, there was a fairly limited pool of potential purchasers.

Morrisons already has a Tamworth superstore in Marlborough Way, Wilnecote – a couple of miles from the centre of town – but its purchase of the Netto site should give a boost to the town centre’s retail offer by providing a much wider range of goods than Netto currently offers.

Gungate Precinct with Kwik Save store in the early 1990s

The purchase by Morrisons is the latest development in a fairly turbulent history for the Upper Gungate supermarket site, which was originally built as a Kwik Save in the 1990s. For a time, it was open concurrently with the previous, smaller Kwik Save in the Gungate Precinct – a unit that had housed Tesco and Victor Value back in the ’70s and ’80s. However, that Kwik Save store eventually closed, and was occupied by Pound Plus until the precinct’s demolition last year.

Following Somerfield’s disastrous 1998 purchase of Kwik Save, the Upper Gungate Kwik Save briefly became a Somerfield, before being turned back into a Kwik Save again. The store then closed down following Kwik Save’s collapse in 2007, standing empty for a year before being reopened as a Netto in August 2008.

Assuming that Asda’s acquisition of Netto receives final approval by the OFT, the handover of Morrisons’ stores is expected to commence on a phased basis in March, with conversion to the Morrisons format taking three months. On this basis, Morrisons should be trading from the site sometime in summer 2011.

Given Morrisons’ retail pedigree, there’s every chance that the store’s latest incarnation will be more long-lived than its increasingly fleeting predecessors.

Former Woolworths (now Iceland), Belper (23 Dec 2010)

Following on from my 2009 visit to Alfreton, Heanor and Ripley in Derbyshire, I was able to pay a fleeting visit this festive season to the nearby town of Belper – famous for its history of textile making, and today part of the Derwent Valley Mills World Heritage Site.

Conveniently, the town’s former Woolies (store #725) is right next to the bus station where I arrived, and is not hard to spot. Opened on 20 May 1938, its frontage is almost identical to that of the Alfreton Woolworths (#684), which opened a year earlier.

Side view of former Woolworths (now Iceland), Belper (23 Dec 2010)

Like the North East Woolies sites in Hexham and Morpeth, Belper was one of the first stores to be taken over by another retailer, as part of the package of 51 sites acquired by Iceland just three days after the final Woolworths stores closed down. For a town with a compact centre and a population of little more than 20,000, this does mean that Belper has four decent-sized supermarkets – Iceland, Haldanes, Midlands Co-op and a large Morrisons – within a short distance of one another. On this basis, you do have to question – as campaigners already are doing – whether the town’s potential 80,000 sq ft edge-of-centre Tesco superstore is really necessary.

Haldanes, Belper (23 Dec 2010)

With Haldanes’ fledgling chain – currently comprised entirely of former Co-op/Somerfield sites – stalled for the moment at